Intangible. Untouchable. All things to some People. And a laughable concept to everyone else…

Hold It Right There

A particularly slow ethereal carrier pigeon brought me copy of the 2010 Annual Report of Rangers Football Club Plc (‘the club’, as made clear on the gates at Ibrox, and by the incorporation documentation of 1899).

All the old favourites are pictured in the first few pages – Alastair Johnston, Martin Bain [admit it, you read that as ‘Bartin Main’ didn’t you?], and dear Walter Smith [his chequebook management certainly WAS dear…].

Oh yes, and a certain D.C. King and P. Murray also get a mention. I wonder whatever happened to them?

Chairman Alastair Johnston’s statement included the following report on debt levels, which are worth a look:

“In terms of debt, our net cash inflow in the year amounted to £4.0m. As I highlighted last year we still had £9.2m payable in terms of historic player transfers. The cash flow in the current year reflects payments of £8.0m on these prior year acquisitions, and resulted in our year end debt in relation to the term loan and overdraft facility with Lloyds Banking Group of £22.3m. Total debt at 30 June 2010, incorporating finance leases and other loans, amounted to £27.1m.

A balance has to be struck between debt reduction and remaining competitive on the playing front. To this end, we agreed a business plan with Lloyds Banking Group in recent months, and whilst we continue to look for new investment, this has enabled an allocation of funding for new players, while at the same time retaining the nucleus of the squad that has served us so well in the past two seasons.

The financial results and the team’s success have assisted in stabilising the business and strengthening our balance sheet. Some caution must be exercised, however, given the effect of the recession on our core revenue streams and the implications to Scottish football of the country’s European ranking. Challenges therefore still remain but I am confident that the management team under the guidance of Martin Bain can continue to enhance the company’s financial performance whilst maintaining our team’s competitive edge on the field.

Every Rangers fan, myself included, knows only too well the issues we have faced in recent times given our debt levels and the distraction of ownership speculation. However, we are now in a position to look forward more constructively and positively as we make every effort to achieve continued success for this great football club.“

There is something almost heart-breaking about that final paragraph. Once you stop laughing about what ultimately happened.

A couple of other paragraphs from the Finance Director, Donald McIntrye also stood out:

“The Club is now in direct contact with Lloyds Banking Group, with more constructive dialogue and an improved understanding from both parties of the current issues and future objectives. A level of investment has been agreed for the playing squad within a revised business plan, but the future has to be viewed with a degree of caution given the current Scottish co-efficient for European competition. A balance has to be struck on remaining competitive, whilst reducing our dependency on debt funding and thereby ensuring the longer term sustainability of the Club.

In May 2010 UEFA approved the Financial Fair Play Regulations. This means that the Club’s financial position and ultimately European participation will be assessed on a series of different indicators and requirements. A phased implementation of the regulations will take place over the next three years, culminating in a ‘break-even requirement,’ being a balance between expenditure, in particular salaries and transfer fees, and income generated. These requirements will be closely monitored to ensure compliance.”

There is the toxic combination that ultimately helped to kill Rangers: a dependency on debt funding, which increased the need for Champions League football at a time when it was getting harder to secure year-in and year out.

In short, Rangers couldn’t really afford to be in the Champions League, but they couldn’t afford to be outside it either…

A situation made more difficult by our old friend Hector:

“On the basis of expert tax advice, the Club is defending a query raised by HMRC into the operation of the Murray Group Management Limited Remuneration Trust, established to provide incentives to certain employees and other service providers. This is part of an ongoing tax enquiry scheduled to be heard by a tax tribunal before the end of the year. It would therefore be inappropriate to comment further on matters pending the outcome of this tribunal.”

Oh dear.

But the thing that most struck me about this dignified document was the use of the term ‘Club’.

“The financial parameters within which the Club was operating”

“Sterling efforts of the staff at the Club”

“Every effort will be made to refine our operations and further maximise the Club’s non-playing income.”

“The continued development of our youth policy and Academy at Murray Park is of paramount importance and the Club is committed to future investment in this area of our business.”

“Ensure the Club’s ticketing strategy protects our ticketing revenues and attracts new fans to Ibrox in an increasingly difficult market.”

“A relatively unattractive draw in the Champions League had a noticeable impact on European income and prevented the Club from capitalising on glamour ties as in previous years, by offering off-site hospitality. Nonetheless, hospitality income for the season reached £4.2m.”

“In Season 2009/10, RangersTV.tv launched its own ground-breaking internet channel which now covers live games and offers a matchday service for overseas fans in addition to an on-demand service for UK supporters. The channel also develops day to day programming for the Club’s portfolio of multi-media channels.”

“The key focus of our media strategy is to ensure the Club can be in greater control of its revenue earning potential from media in UK and overseas markets.”

“As the Club’s partnership with Carling came to an end, our priority was to secure a new title sponsor looking to capitalise on the strength of the Rangers brand. We were delighted to confirm Tennent’s as the official Club and shirt sponsor in a three year partnership agreement.”

“Our relationship with Thomas Cook Sport as the Club’s official travel partner was extended with an enhanced four year agreement, taking us to 2014.”

“The Club continues to work closely with JJB to improve and enhance the retail offering to Rangers supporters.”

“In June 2006, the Club agreed to grant a ten year licence to JJB Sports plc.”

“The effect of the economic downturn and the focus on the level of debt within the Club.”

“Imposing greater financial disciplines to ensure the long term sustainability of the Club.”

“The financial impact on the Club’s income.”

“Diluted the impact of cash receipts from the Club’s participation in the 2009/10 Champions League.”

“The Club is now in direct contact with Lloyds Banking Group.”

“The principal activity of the Company and Group is the operation of a professional football club.” [i.e. they do things which are aimed at (and related-to) putting a football team on the pitch.]

As you can see, the audited accounts paint a picture of the ‘club’ engaging in real-world activities and transactions as if it was a [*cough cough cough*] company…

Which of course it was!

But what of the legendary holding company which is apparently in liquidation following the creditors’ rejection of the CVA in June 2012?

Well, I won’t lie to you. The holding company is squarely acknowledged in the accounts without any ambiguity whatsoever.

“30. ULTIMATE HOLDING COMPANY
The Directors consider that the ultimate holding company is Murray International Holdings Ltd. (reg. no. SC 192523). As Sir David E. Murray has a controlling interest in the share capital of the ultimate holding company he is considered to be the ultimate controlling related party. The largest and smallest group in which the results of the Company are consolidated is that headed by the ultimate holding company whose registered office is at 9 Charlotte Square, Edinburgh, EH2 4DR”.

So there you have it. There was a holding company for Rangers Football Club. But it was Murray International Holdings! As we all know, MIH itself ultimately went into liquidation. And it wasn’t a liquidation which happened so that an ethereal ‘Rangers’ might live. No, it was a liquidation that happened ALONGSIDE that of Rangers.

This very simple truth can be ignored by sticking your fingers in your ears, closing your eyes and shouting “la la la la haters!”, but that won’t make it go away.

If MIH was actually the ‘real world’ manifestation of an ethereal Rangers Football Club – i.e. the ‘legal entity’ which UEFA rules require – then presumably it would be veryeasyindeed to produce paperwork wherein MIH applied for a UEFA licence every time that ‘Rangers’ qualified for Europe.

Does anyone have it?

Funnily enough, I don’t seem to recall Murray International Holdings playing Zenit St Petersburg in the 2008 UEFA Cup final. Do you?

Of course not. Although it might have put on a more entertaining display…

I also don’t recall Murray International Holdings being a member of the SFA or the SPL. Perhaps I am wrong, in which case the MIH liquidators ought to slap in a claim on the trophies won by ethereal ‘Rangers’ during the Sir David Murray years. They might make a few quid for creditors if they sold them for scrap.

And while they are doing that, perhaps they should also make a claim on the history bought by Charles Green? Each creditor could get get their own little piece of it. Perhaps one of the games when an EBT recipient played? Complete with a certificate of authenticity written on the back of a side letter.

Who wouldn’t want to ‘own’ a bit of sporting history like that?

I am grateful to the ethereal carrier pigeon for giving me the opportunity to point out the sheer madness of those who lie, lie and lie again about a made-up holding company which can be conveniently detached from the ‘club’ the moment something bad happens.

We all know that the legal entity which (for example) applied for those UEFA licences (including the one in focus as a result of Resolution 12) was Rangers Football Club PLC, an incorporated entity… And we all know that when something is incorporated it can also be liquidated.

The truth about the incorporated nature of Rangers is set out in black and white in its 2010 accounts. Accounts whose production is governed by the law.

Some Sevco fans and media outlets may have turned ‘liquidation denial’ into an art form, but that doesn’t mean it isn’t a complete load of crap.